Maintaining an exercise routine by agreeing to pay a small penalty if a gym session is missed

Avoiding drunk driving by hiring a limo service beforehand

Joining a peer savings group to encourage saving money

Channelling money into a separate account to reduce the likelihood of it being spent

A guide to the process

Map the context

Identify factors that prevent individuals from following through with their intentions.

Consider four aspects of the decision-making process:

The properties of the decision: including incentives, motivations, and level of attention. Identify the default option

Information sources

Features of the individual’s mindset: are emotions a factor?

Environmental and social factors: such as peer pressure, complexity of the process, etc.

Make a decision map from this information

Select the nudge

Bottlenecks are a good place to start.

Map them onto the taxonomy through four questions:

Is there awareness but inability to do? Does the behaviour need to be activated?

Can they self-impose?

Will more cognition help or hinder?

Is it limited by a competing action, inertia? Should we discourage the competing or encourage the target?

Behavioural influences

Status quo: maintaining the current state

Endowment effect: value more something that is already in possession

Loss aversion: more attuned to losses than gains

Confirmation bias: accept information that confirms rather than infirm

Mental accounting: money is mentally allocated

Willpower: willpower is limited and needs to be replenished

Hyperbolic discounting: more value accorded to the now than the future

Choice overload: too many choices makes it hard to evaluate and decide

Information overload: too much information precludes evaluation and making a decision

Heuristics

Availability bias: mentally readily available information is used to make a decision rather than using a comprehensive set

Representativeness: use similar attributes to judge the likelihood of an event occurring

Anchoring and adjustment: Make estimate by adjusting from a particular reference value

Social proof: conform to observed or presumed behaviours by peers

Identify the levers for nudging

Identify constraints such as cost or resource availability.

Consider which part of the choice architecture can be acted upon.

Experiment and iterate

Prioritize among the selected nudges

Going all in may not be the best option. Consider:

Bottlenecks addressed by the nudges: go for upstream impact

Relative reach

Determine whether segments of the target audience have different behavioural preferences

Long-term effectiveness of the nudge

Test for effectiveness

Given that behavioural economics is still a relatively fledgling field and that much of the research done is theoretical in nature, it is important for the choice architecture to test and document the effectiveness of nudging strategies.